Dec 19 2017

Turkish inflation will slow to single digits in 2018 – minister

Turkish inflation will slow to single digits early next year and will remain at such levels, Economy Minister Nihat Zeybekçi said.

The rate of price increases will slow in the first quarter and may decline to single digits in April, after which the government aims to keep the rate at such levels, Zeybekçi said, according to Hürriyet newspaper. It expects inflation to slow towards the central bank’s percent target in 2019, he said.

Turkish inflation surged to 13 percent in November, the highest level in major emerging markets in Asia, Africa and Europe, after the lira slid against the dollar and the government stimulated the economy with tax reductions on some goods and a credit guarantee scheme. The annual base effect means the inflation rate is due to slow in the first quarter of 2018.

Industrial production and capacity utilization data indicate that manufacturing and exports will remain strong in the fourth quarter of 2017, meaning the economy may grow at higher rates than expected, Zeybekçi said.

The government foresees economic growth exceeding 6 percent in 2018, helped on by exports, which will easily exceed the government’s $169 billion goal, he said.